Daily Deduction

from the Tax Policy Center

A Ditch, an Add, and Maybe an End Run

Australia repeals its two-year-old carbon tax. It’s been a contentious issue for seven years. Australia is one of the biggest producers of carbon emissions per capita. Its government is committed to reducing emissions to 5 percent below year 2000 levels by 2020. A carbon tax might have been the most expedient method to accomplish that goal but Prime Minister Tony Abbott prefers a taxpayer-financed AU$2.55 billion incentive fund for companies that use cleaner energy.

The Senate wants to bypass the Finance Committee on internet taxation. The Internet Tax Freedom Act, banning states and localities from taxing internet access, passed the House this week. The Marketplace Fairness Act, designed to allow states to collect sales tax from internet retailers, passed the Senate last year. Illinois Democrat Senator Dick Durbin would like to combine the two bills in the Senate to send to the House. But Senate Finance Committee Chair Ron Wyden is against blending the two bills.

Could the rush to inversions sink tax reform? The hottest new M&A trend is corporate inversions that allow US firms to cut their tax bills by acquiring a foreign company. But as more high-tax firms vote with their feet, pressure for corporate tax reform could fade, says TPC’s Howard Gleckman.